By Jeffery Smith of Portland, Oregon. Jeffery describes himself as "a researcher, writer, and organizer in ecological economics (geonomics)." Learn more about his work at geonomics.org.
Honestly, economists know the best way to tax. Use that power to recover for society the economic values that society generates. Don't use taxes to take the values that individuals create.
Across the Pacific, Sydney Australia is a model; they tax land, not buildings. When government does that, it recovers a socially generated value. Recall the old saw, the three most important things in real estate: location, location, location. It's nearness to lovely nature, law-abiding neighbors, good schools and jobs, major roads, and vibrant downtowns that entice people to part with vaults of cash for land.
Conversely, when we tax buildings, income, and sales, then we trespass. Those values are created by builders, workers, and entrepreneurs. When we tax such goods more, we get less of them. US HUD concluded that taxing buildings in marginal areas creates slums. Taxing wages loses jobs. And taxing business reduces investment.
In order to more easily afford their 'land dues', owners who'd been speculating or procrastinating (including politicians and bureaucrats with public land) would get busy and develop their sites. The new development creates jobs and local spending. Nearly a dozen Nobel laureate economists recommend levying site value in lieu of taxing the things we do make. When Denmark did it, inflation fell to under 1%. When New Zealand did it, for 10 years employment hit 99%. In Australia, the towns taxing land, not buildings, increased their manufacturing businesses 10% -- while the rest of the country was in a recession.
Places that shift taxes off buildings onto land make more good things happen. As the new development in-fills the city, it shortens travel distances and times, reducing traffic. That in turn reduces smog and oily runoff. Infill also curbs sprawl, again benefiting the environment. Steven Reed, Mayor of Harrisburg PA, gives complete credit to his city's land tax for preserving suburban farmland. Unlike all others, site value taxes are both fair and efficient. Now you know, too.